The asymmetrical impact of the economic crisis on unemployment and welfare in Greek urban economies

The article analyses the impact of the ongoing economic crisis on Greek urban economies. Utilizing a dataset of socio-economic, demographic and policy variables at the municipal level and applying spatial econometric techniques, it provides strong statistical evidence of heterogeneous effects on regional-municipal labour markets and welfare with the cities/municipalities that performed best in the pre-crisis period suffering more than the lagging municipalities and with urban agglomerations more vulnerable to crisis, thus questioning the length of bottoming. However, exogenously set variables, tourism and policy related, the inherent features of urban economies, such as the specialization of industry, and their inter-linkages with their peri-rural municipalities, act as stabilizers that ease the crisis effects and may support recovery. Fiscal policy has been cyclical to the economic downturn. The findings have substantial policy implications for crisis management, recovery policy measures and the country's cohesion.